Rig Count Scraping Along The Bottom

Halliburton President Jeff Miller described the current US rig count as "scraping along the bottom" this morning.

After a 40% fall during the second quarter, the US land rig count has trended essentially sideways for the past several weeks. So what happens next? Here's what Halliburton thinks the path forward in their North American business looks like:

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"The exact timing is difficult to predict, but the previous cycles would point us to the following progression of how the story should play out as we move forward. First, activity stabilizing means the healing process can begin with respect to pricing and margins. This will then allow our cost savings to catch up and our efficiency programs and well solutions can begin driving margins up. Price improvement will then be a challenge until we see capacity tightening in the market. Therefore, any margin improvement will likely be the result of lowering our cost base." (Jeff Miller, Halliburton)

Weekly Rig Count Statistics

The North America rig count rose 17 units last week, driven by gains in Canada. In the US onshore market, rig count was down 3 units as horizontal oil drilling fell slightly.

While the weekly figures will ebb and flow and another leg down in oil prices would restart a negative trend, we believe the trough has now been effectively established for this phase of the downturn (in the 800-850 range).

In Canada, the rig count had a strong week, gaining 23 rigs to 192 for the week. The strength is seasonally expected. Read more...

Source: OilPro.com